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📜 India's New Labour Codes: A Transformative Shift in Employment Law
India has embarked on a significant reform of its employment legislation by consolidating 29 fragmented central labour laws into four comprehensive Labour Codes. This move, effective from November 21, 2025, aims to simplify compliance, modernize regulations, and extend workers' welfare benefits across the organised and unorganised sectors.

The Four New Labour Codes
The new framework is structured around four pillars, each addressing a crucial aspect of the employer-employee relationship:

The Code on Wages, 2019: Merges four laws relating to wages, bonus, and equal remuneration.

The Industrial Relations Code, 2020: Amalgamates laws concerning trade unions, employment conditions, and industrial disputes.

The Code on Social Security, 2020: Consolidates nine laws concerning social security, including Provident Fund (PF), Employees' State Insurance Corporation (ESIC), and gratuity.

The Occupational Safety, Health and Working Conditions Code (OSH Code), 2020: Merges 13 laws related to workplace safety, health, and welfare.

Comparison: Old Laws vs. New Codes
The transition marks a paradigm shift in several key areas:

Particulars, Pre Labour Codes (Old Laws) Post Labour Codes (New Codes - 2025)

Legislation Structure Complex web of 29 fragmented Central Acts. Consolidated into 4 streamlined Codes for easier compliance.

Minimum Wages Applicable mainly to scheduled industries, leaving many outside coverage. Guaranteed statutory right to minimum wages for all workers across all sectors.

Formalisation No mandatory requirement for appointment letters. Mandatory appointment letters for all workers to formalise employment.

Social Security Limited coverage, often excluding gig and informal workers. Expanded coverage for all workers, including gig and platform workers.

Gender Equality Restrictions on women in night shifts and certain occupations (e.g., underground mining).| Women permitted to work night shifts and in all occupations (with consent and safety measures).

Definition of 'Wages' Inconsistent definition across various Acts, leading to ambiguity. Uniform definition where basic pay, dearness allowance, and retaining allowance must be at least 50% of CTC.
Gratuity Eligibility for gratuity after five years of service. Eligibility for gratuity for fixed-term employees after just one year of service.

👍 Benefits (Merits) of the New Labour Codes
The new codes offer significant advantages for both workers and businesses:
For Workers
Universal Minimum Wage: All workers, including those in the unorganised sector, are guaranteed a minimum wage, coupled with a national floor wage to ensure a basic standard of living.
Enhanced Social Security: Gig, platform, and unorganised sector workers gain legal recognition and access to social security benefits (PF, ESIC, etc.).
Formalisation and Clarity: Mandatory written appointment letters formalise employment, provide proof of work, and clarify wages and entitlements.
Gender Parity: Equal pay for equal work is ensured, and expanded opportunities for women in night shifts and all types of work can lead to higher earnings.
Improved Safety: Stricter and unified occupational safety and health standards are mandated across all establishments.
For Businesses
Ease of Doing Business: Consolidating 29 laws into 4 simplifies compliance, reducing the administrative burden of multiple registrations, licenses, and returns (one registration, one licence, one return).
resolution of disputes aim to bring about industrial harmony and flexibility.

Modern Workforce Management: The codes align India's labour practices with evolving work models and international standards, enhancing the country's competitiveness.

👎 Demerits and Concerns
Despite the progressive goals, the codes have raised certain concerns:
Impact on Take-Home Salary: The new uniform definition of 'wages' mandating basic pay to be at least 50% of the Cost to Company (CTC) means employers must restructure salaries. This will increase the employer's contribution to PF and Gratuity but will consequently reduce the employee's monthly take-home salary.
Increased Compliance Cost for Small Businesses: Extending social security and formal employment norms to micro and small enterprises, especially those in the informal economy, may increase their operational costs, potentially hindering their growth or push them further into informal practices.
Gig Worker Implementation: While the Code on Social Security covers gig and platform workers, the implementation and funding mechanism for their social security benefits still require clear and robust state level rules.
Threshold for Industrial Disputes: Some critics argue that the Industrial Relations Code makes it harder for workers to form trade unions or strike, and allows employers to implement changes more easily, potentially skewing the balance of power toward manager